The Technology of Subscription Models: Paywalls, Email, and More

In our last post, we discussed a few things publishers should think about before taking the plunge into subscription business models. Today, we’ll talk a little more about one of those topics in particular: the technology behind subscription models.

From paywall meter resets to payment processing hiccups, technology trip-ups can pose a roadblock on the path to profitability. But even if everything goes off without a hitch, your technology will get in the way if your business model changes and your technology doesn’t.

Of course, a list of the tech involved in premium content models could span several miles long, so here, we’ll focus on a select few aspects that are critical to driving paid subscription revenue:

Optimize your wall with dynamic paywall solutions.

The earliest paywalls required significant technical investment, making for costly experiments that sometimes led to costly failures—particularly as they were also tough to tweak when paywall settings weren’t working.

No matter your paywall strategy, landing on the optimal paywall configuration for your audience will take work. You’ll need a paywall flexible enough to tweak tactics on the fly, adjust messaging, and A/B test new changes, all without having to upend your site. Fortunately, today’s paywall solutions make this easier.

That’s not the only way paywall solutions are changing. No longer a one-size-fits-all solution, the paywall strategy of 2019 relies on a publisher’s ability to adapt to individual visitors. Today’s most famous example might be the Wall Street Journal’s paywall, which adjusts access to content based on an individual’s propensity to pay:

“Non-subscribed visitors to WSJ.com now each receive a propensity score based on more than 60 signals, such as whether the reader is visiting for the first time, the operating system they’re using, the device they’re reading on, what they chose to click on, and their location…Using machine learning to inform a more flexible paywall takes away guesswork around how many stories, or what kinds of stories, to let readers read for free, and whether readers will respond to hitting paywall by paying for access or simply leaving.”

Dynamic paywalls like the Wall Street Journal’s help publishers maximize both subscription and advertising revenue: people who are willing to pay will hit the paywall, while people who will never pay can still generate ad revenue for you. For most publishers, moving to a subscription model doesn’t mean they’re dropping ads entirely, so if your business model relies on a mix of both revenue streams, paywall technology that balances the two is a must.

The industry-wide shift to subscriptions stems from the diminishing returns of ad-driven models. Increased ad inventory on publisher pages sent CPMs plummeting, and the advent of ad blockers certainly didn’t help things either. Ad blocking detection allows publishers to deal with ad blockers and recoup revenue, but a similar storm is brewing with subscription models.

Much like the ad blocking arms race, the rise of paywalls will lead to a rise in attempts to circumvent them. The Reuters Institute for the Study of Journalism predicts increased tension between paywalls and audiences in 2019:

“We’ll see growing adoption of ‘subscription blockers’, downloadable software or browser extensions that that get round metered paywalls by blocking the javascript that triggers them. Forcing users to login for any content is one way round this, but this will reduce fly-by users and the resulting advertising revenue.”

For publishers with metered paywalls, beating the paywall can be as simple as browsing in private or incognito mode to access additional articles. With the tech to detect ad-blocking and private browsers, you can nudge these users to browse normally—or cut off their access to content completely.

Also of note: subscription business models give you additional leverage to encourage readers to stop blocking your ads. When ad blockers are detected, you can throttle the paywall meter (and prevent incognito browsing!) until the user whitelists you or signs up for a newsletter. In paid subscription business models, getting the email address can be even more valuable than getting the ad impression.

Nurture your audience with a solid email newsletter program.

Publishers might be turning to new technology to drive subscriptions, but that doesn’t mean they’re leaving the old standbys behind.

At the heart of a healthy subscription model is a healthy email program. Publishers like The New Yorker often find that their newsletter subscribers are most likely to become paying subscribers. In fact, the Seattle Times reports that readers referred from email newsletters are 25 times more likelyto purchase a subscription than visitors from Facebook. According to Seattle Times email product manager Kristi Waite:

“…we have to work a lot less hard to convert a newsletter sign-up than a Facebook user or something else. We’ve learned that getting people into our newsletter funnel, often times through the Morning Brief…and then trying to get them on more emails has helped to convert those to subscriptions.”

That being said, a seemingly-simple medium might still require robust email solutions, especially for premium publishers. For instance, you can’t encourage newsletter subscribers to opt into additional newsletters if you don’t have the resources to offer additional newsletter products. To scale your email program and maximize paid subscriptions, make sure your email service provider (among other things):

“…the way towards healthy CLV is to drive usage at every opportunity. Keeping people engaged keeps them paying customers. Strategies which achieve that include cross-selling and upselling. For example, the New York Times saw solid growth of new subscribers from their crossword and cooking app offerings.”

To engage your audience most effectively, you need a way to establish audience identity and leverage the first-party data from your audience to provide targeted experiences. Establishing and reconciling audience identity is simple enough for paying subscribers, who identify themselves when they subscribe, but what about your free audience? After all, knowing your audience is critical to getting the conversion in the first place. You can ask them to “register for a free account,” but there’s little incentive to do so.

The search for an identity solution has led many publishers to customer data platforms (CDPs), which unify data and make it actionable at the user level. Provided your ESP and other technology integrate with your CDP, this can be a powerful path to deeper engagement.

Of course, sometimes better publisher technology doesn’t mean adopting new platforms; sometimes it means making better use of the technology you already have. Publishers can also tie identity to the email address. Because the email address essentially serves as a user’s home on the internet, email clicks carry user identity, allowing you to establish and reconcile identity with every click. This, in tandem with their content consumption data, can give you the tools you need to maximize engagement and revenue in subscription models.